The pieces fall into place

Our own ambitions, international agreements, laws and regulations have been the most important drivers. For example, we submitted our climate goals to the Science Based Targets initiative (SBTi), obtained our first sustainability-linked bank loan, certified six additional properties to BREEAM In-Use with a rating of Very Good, reported according to the EU’s green taxonomy and launched a strategic initiative within diversity and inclusion.

Teamwork and Science Based Targets

In 2022 sustainability became a team effort as stronger links were established between the various departments and our SBTi targets became our guiding star. The targets will hopefully be approved in June 2023 when SBTi will review our application and our level of ambition. An important focus for Pandox will be implementing strategic energy efficiency measurs throughout the portfolio and reducing dependence on natural gas at hotels operated by Pandox. Studies are already under way at four hotels operated by Pandox to explore the possibility of replacing natural gas with pumps for both heating and cooling. Pandox will also be working on reducing material use and using more sustainable materials in renovations. This will involve a major focus on building more knowledge about the properties, how different materials and installations impact climate emissions and what impact climate change is having. These insights will be key factors in our strategic decisions and also in our value creation going forward.

New talent strengthens the organisation

An energy specialist has been added to strengthen our sustainability team in order to carry out energy mapping and provide recommendations. The aim is to advance our dialogue with tenants on supplementing the existing leases with green agreements. It is important for both parties to view the properties based on the realities we face as new expectations and requirements emerge.

The taxonomy and Pandox’s role

The taxonomy reveals the clear ambitions of the EU. Although we feel that the taxonomy focuses too much on new production, it does urge investors to pay closer attention to sustainability than in the past. Pandox’s strategy is to own properties and improve them. According to the EU, by renovating existing buildings it should be possible to reduce the

EU’s total energy consumption by 5–6 percent and to lower carbon emissions by the same amount. Yet on average fewer than one percent of the national building stock is renovated every year. Pandox has an important role to play in the transition by improving the performance of existing properties. Our green investment programme is doing good by driving development towards energy-efficient properties. Additional and significant steps will also be taken based on the science-based targets in place. However, the taxonomy’s requirement that every property is to have an energy performance certificate with a rating of A or B is in most cases not commercially justifiable, for example for an existing property built in the 1970s. At that time buildings were constructed with inferior insulation and less was known about energy efficiency.

Green incentives

In 2022 we decided to incorporate a sustainability index into the general managers’ productivity system for their daily operations. The purpose is to visualise and create a daily focus on sustainability topics and targets. The index is based on six categories: energy, water, food waste, waste, towels and linen, as well as chemicals grouped together depending on impact. From the beginning of 2023 the hotel managers’ variable cash remuneration is directly linked to the index.

Climate risk assessment to future-proof the properties

Our long-term focus on sustainability includes analysis and climate adaptation of Pandox’s properties where there is a high risk of a negative impact from a changed climate. During the year a desktop analysis of these risks was carried out for all properties with the help of a new climate tool. This was followed by two site inspections as well as an in-depth analysis of one additional property. From now on,  analysis and proposed measures will form a natural component in the annual investment process.

Diversity and inclusion in focus

Employee commitment is a key success factor for Pandox. In the wake of the pandemic and its consequences – with difficulties finding personnel and new expectations of employers from younger generations – it is more important than ever to be able to attract new people and encourage existing employees to stay on. To this end, representatives from the executive management team, headed by the CEO, and key individuals within the organisation attended a workshop on diversity and inclusion. This was a first step towards coming together around a common ambition and vision. This will be a constant process and will result in concrete goals being established in the coming year.

Plan to be launched in 2023

If we take a peek at 2023, we will see a year in which initiatives launched in 2022 are implemented. This effort will require a willingness throughout the organisation to embrace change. It will also be an exciting year with many new opportunities and new knowledge enabling us to offer resource-efficient properties.

Stockholm, March 2023
Caroline Tivéus
SVP, Director of Sustainable Business